health insurance terms

   Health Insurance Terminology

Claim: A request by an individual or health care provider to an individual's insurance company that asks the insurance company to pay for services obtained from a health care professional.

Co-insurance: Co-insurance refers to money that an individual is required to pay for services, after a deductible has been paid. In some health plans, coinsurance is called a "co-payment." Co-insurance is often specified by a certain percentage. For example, the employee pays 20% toward charges for a particular service and the employer or insurance company pays 80%.

Co-payment: This is just another way of sharing medical costs. With a Co-payment, you pay a flat fee every time you receive a medical service (for example, $5 for every visit to the doctor). The insurance company then pays the rest.

Covered Expenses: Whether an insurance plan is fee-for-service, HMO, or PPO, insurance companies do not pay for all services. For example, some may not pay for prescription drugs. Others may not pay for mental health care. Covered services are those medical procedures the insurer agrees to pay for. Your policy will list the covered services.

Deductible: The amount of money you must pay each year to cover your medical care expenses before your insurance policy starts paying.

Denial of a Claim: Refusal by an insurance company to pay a claim submitted to them on behalf of an insured individual by a health care provider.

Exclusions and Limitations: Medical services that are either not covered or limited in benefit by an individual's insurance policy.

HMO: As previously described, an HMO covers your physician visit(s), hospital stay(s), emergency and other medical treatments, but has certain restrictions that govern the policy. You must use the physicians and hospitals designated by the HMO. (The insurance provider will give you a list of physicians to choose from.) In addition, an HMO stipulates that you will need to go to a primary care physician and get a referral if you’re in a situation where you need further testing or visits with a medical specialist.

Managed Care: This is a way to manage costs, use, and quality of the health care system. All HMOs and PPOs, and many fee-for-service plans, have managed care.

Medically Necessary: Many insurance policies will pay only for treatment that is deemed "medically necessary" to restore a persons health. For instance, many policies will not cover routine physical exams or plastic surgery for cosmetic purposes.

Out-Of-Plan: This phrase usually refers to physicians, hospitals or other health care providers who do not contract with the insurance plan (usually HMOs and PPOs). Depending upon the insurance plan, expenses incurred by services provided by out-of-plan health professionals may not be covered, or covered only in part by an individual's insurance company.

Out-of-Pocket Expenses: The funds you will be required pay per year for deductibles and coinsurance. Out of pocket expenses are a stated dollar amount set by the insurance company, which is above and beyond regular premium cost.

PPO: You pay a monthly premium and can choose any physician (primary or specialist) without getting a referral first. When you use the doctors and hospitals that are part of the PPO, a larger part of your medical bills may be covered.

Pre-Admission Certification: This is an approval by an insurance company representative for a person to be admitted to a hospital or in-patient facility in advance of their admission. Usually, the patient's physician requests that this process be completed.

Pre-existing Condition: A health problem that existed before you purchased your insurance policy.

Premium: The amount you or your employer pays in exchange for insurance coverage.

Primary Care Doctor: This is often a family physician. A primary care doctor diagnoses and treats basic health problems, and refers you to specialists if a higher level of treatment is needed.

Provider: Any person (doctor, nurse, dentist) or institution (hospital or clinic) that provides medical care.

Waiver: A rider or amendment to a policy that restricts benefits by excluding certain medical conditions from coverage.



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